After a bankruptcy, the idea of ever having credit again may seem like an impossible idea. It may seem as though the days of being able to easily buy a car, or get even the smallest loan are long gone. Even more, after a bankruptcy, it becomes quite apparent that there are literally hundreds of offers from various companies wanting to help you fix your credit.

The road to rebuilding and re-establishing credit is certainly not an easy road to travel. In fact, the first few months after a bankruptcy are going to be a very difficult time in the credit life of any individual. However, it is during this time that you can take steps to begin to re-establish and build a new credit record that can very quickly, in fact, more quickly that most people realize, get you back on the road to credit bliss.

While the methods that often have to be used to re-establish credit are not glamorous, and can even be somewhat humiliating for a person who just a few month prior was accustomed to having access to limitless credit, these methods are effective ways to get back onto the road of good credit.

Secured Credit Cards

One of the easiest ways to re-establish your credit is by applying for a secured credit card. This type of credit card is just what it says: secured. For the privilege of having a $500 or $1000 credit card, you must deposit that much money with the credit grantor.

When the bill comes due each month for your purchases, you still pay on the credit card as though you had never made the deposit. The original deposit is simply security for the lender in case you default on the loan. Usually, the deposit money is refunded, either in increments or in a lump sum after several months of on-time payments.

The key to using a secured credit card to re-establish your credit is to find a credit card company that reports your payment history to the three major credit bureaus. You can usually find such a card through your local bank or credit union.

By reporting to the three major bureaus, which are Equifax, TransUnion, and Experian, you are giving yourself an open line of credit with a good payment history. Every open line of credit with a good payment history begins to outweigh the negatives. Slowly, but surely, your credit score—and your ability to get credit—will increase.

High-Interest Cards

Another way to re-establish credit after a bankruptcy is to apply for high-interest, fee-heavy credit cards. These cards usually come with interest rates between 21% and 28%. In addition, they also come with high annual fees, set-up fees, and other charges. Often, these charges and fees can add up to nearly the credit limit of the card.

While applying for these cards may seem pointless when you consider the fees, there are advantages to these cards. Most of these cards will increase your credit limit after a few months of on-time payments. In addition, once the initial fees are paid down, only the annual fees and possibly a small monthly fee of a few dollars remain as recurring charges. Also, some of these lenders offer other types of loans, such as car loans and mortgages, that you can apply for once you have proven your credit worthiness.

Buy Here, Pay Here

Another way to re-establish your credit can come from buying something that most Americans can’t live without: a car. Of course, buying a car after a bankruptcy is not going to be as easy as walking onto a car lot and signing the papers. In fact, it is probably going to require visiting a car lot that does its own financing—also known as buy here, pay here.

When most people think of a buy here, pay here lot, they often think of a bunch of lemons sitting on a car lot with a dilapidated trailer as the business office. While these places do exist, the idea of car lots that do their own financing for people with bad credit has spread across the country.

Many of these new-age buy here, pay here lots actually look like franchised car dealerships. They have newer models that are well-maintained, and not about to fall apart as soon as you drive off the lot. Some of these dealers even have service departments to keep the cars running after the sale. In addition, what makes them wonderful for the person with a recent bankruptcy is the fact that, just like any major lender, they report payment histories to the credit bureaus.

Of course, the interest rates at they types of dealerships will be higher. However, after a couple of years of on-time payments being reported to the credit bureaus, your chances of getting a lower interest car loan through a major lender are greatly improved.

Small Loans

Finally, another way to re-establish your credit is to use the reputation you have with your bank or credit union. If you have a history of not bouncing checks or having a lot of charges for insufficient funds, then your bank may extend you a small loan to assist with re-establishing your credit.

Often, the way to get a loan through this method is to have a personal relationship with your institution. If you have a loan officer or bank associate that knows you and your history, talk to that person and explain that you want a small loan that you can pay back in a few months as a way to rebuild your credit.

While it may be a blow to the ego, being honest about your credit problems, regardless of the person or agency that you are dealing with, is important in re-establishing your credit—and dealing with your past credit issues.

The bottom line to re-establishing your credit is to look for avenues that will give you a loan that will be reported to the credit bureaus. A loan for the sake of a loan is not going to do anything. It must be documented that you are working to show the world that you have learned from past mistakes. And remember, a credit mistake is something that can be corrected; it just takes a little time.